Resources

Tariff Reform Impact Simulation Tool (TRIST)

Purpose:
TRIST is an interactive Excel based tool to simulate the short term impacts of tariff reform on fiscal revenue, imports and protection and to indicate which sectors of the domestic economy are likely to be most affected in terms of output and employment. Its purpose is to allow policymakers to quickly evaluate the adjustment costs associated with trade policy decisions.

Setup:
TRIST is based on import and tariff, VAT and excise revenue data at the tariff line (HS 8 digit) level, broken down by trading partner groups. Import responses to tariff changes are modeled in a partial equilibrium framework taking into account substitution of imports from different sources, substitution of domestic production with imports and the effect of tariff liberalization on overall demand.

Advantages:
TRIST is …

Based on data for actually collected revenue so collection efficiency and exemptions can be taken into account

Flexible enough to incorporate any tariff reform scenario

Policy relevant: It allows to users simulate the impact of tariff reform on total fiscal revenue (including VAT and excise) and revenue results are broken down to the product level so products that are sensitive in terms of revenue impact can be identified. Results for changes in imports, protection and domestic output and employment can help to analyze the impact of tariff reform at sector level.

Transparent: The whole tool is set up in Excel so all formulas and calculation steps are visible for the user. It is open-source in the sense that users are free to change, extend or improve according to their needs.

Simple to use: The underlying modeling is intuitive and simulations can be made by anyone within minutes once the appropriate tariff scenarios have been entered

Limitations:
Please notice that TRIST is only relevant for partial equilibrium analysis of short-term impacts of trade reform. It cannot be used to provide an overall (medium to long term) estimate of the impact of a reform scenario. With respect to production and employment, TRIST should only be used to assess the short term relative vulnerability of different sectors of the economy. Please click here for a discussion of the tool’s limitations.